City Council Special Call Meeting Budget Workshop Morning Session - 5/3/24 - 8:30 AM

City Council Budget Workshop Recap: Setting the Stage for Fiscal Year 2024-25

On May 3, 2024, the City Council held a Special Call Meeting – a morning session of their Budget Workshop – to begin discussions surrounding the proposed budget for fiscal year 2024-25. This session served as an informational overview, laying the groundwork for future budget decisions that will directly impact residents and city services. No formal votes were taken during this initial workshop; instead, the focus was on understanding the current financial landscape and exploring potential adjustments.

A significant portion of the meeting centered around a detailed presentation of the proposed budget, outlining potential changes to key areas. Council members were presented with a 1.5-cent tax rate increase, bringing the total to $0.505 per $100 of assessed property value. Alongside this, proposed increases were discussed for water and sewer rates (11% and 12%, respectively), as well as a $1 increase to the stormwater rate, bringing it to $7 per Equivalent Residential Unit (ERU). The budget also includes a 4% Cost of Living Adjustment (COLA) for all city employees, alongside the introduction of a new merit-based pay program. Five new positions are recommended, with four focused on the water and sewer departments and one within the general fund.

Beyond specific figures, a crucial discussion revolved around Hendersonville’s unique financial context. City Manager Brian led this conversation, emphasizing the need for a realistic assessment of expenditure growth versus revenue generation. He highlighted the challenges inherent in simultaneously pursuing low taxes, a manageable population density, and stable city services – a concept illustrated by the "venn diagram" analogy. The Council also examined Hendersonville’s tax base, noting the significant impact of tax-exempt properties (approximately $579 million) and recognizing positive developments stemming from recent industrial growth and residential projects. A potential Payment in Lieu Of Taxes (PILOT) program for non-profit organizations was also briefly discussed.

The Council reviewed a newly developed "Financial Condition Scorecard" designed to monitor the city's financial health, providing key indicators related to fund balance, operations, capital investments and debt. An update was also provided on the allocation and spending of American Rescue Plan (ARP) funds, demonstrating how these federal resources are being utilized. Finally, the Council engaged in a detailed discussion regarding personnel and compensation, comparing proposed COLA adjustments with those of neighboring municipalities. Future considerations, including housing needs, transportation improvements, park development, and potential general obligation bonds for deferred maintenance at Patton and Whitmire facilities (as well as the need for a third fire station), were also briefly touched upon.

While no formal public comments were received during this session, the discussions highlighted a shared concern among Council members regarding maintaining competitive salaries for public safety personnel and addressing critical deferred maintenance needs. The next steps identified include gathering more detailed data on tax-exempt properties within the county, continuing to monitor sales tax trends and explore potential revenue options, and carefully considering the proposed COLA adjustments. The Council will continue these budget discussions in an afternoon session, ultimately working towards finalizing the FY24-25 budget. Residents can expect further opportunities to engage in this process as decisions are finalized and presented for public review.